Wednesday, December 16, 2009

AP: Confidential documents detail Monsanto's stranglehold on U.S. seed market

Last month we noted a report from The Washington Post about new allegations of monopoly power against seed and chemcial manufacturer Monsanto. Now The Associated Press has obtained confidential contracts detailing "how the seed giant is squeezing competitors, controlling smaller companies and protecting its dominance over the multibillion-dollar market for genetically altered crops." The company is using its wide reach to control the ability of new biotech firms to get wide distribution for their products, Christopher Leonard reports.

The confidential documents reveal the St. Louis-based firm has agreements with some 200 smaller companies for the right to insert so-called "Roundup Ready" genes into strains of corn and soybeans. One contract provision bans independent companies from breeding plants that contain both Monsanto's genes and the genes of any of its competitors unless Monsanto gives prior written permission, Leonard reports. Another provision stipulates if a smaller company changes ownership, its inventory with Monsanto's traits "shall be destroyed immediately."

As Monsanto tightens its stranglehold on the seed market, with its genes implanted into 95 percent of all U.S soybeans and 80 percent of U.S. corn, seed prices have been increasing steadily, Leonard notes. Now the Department of Justice and at least two state attorneys general (Iowa and Texas) are investigating whether the company's practices violate anti-trust laws. Thomas Terral, chief executive officer of Terral Seed in Louisiana, recently refused a Monsanto contract because he felt it had too many restrictions. "The only person I would have value to is Monsanto, and I would continue to pay them millions in fees," he told Leonard.

A Monsanto spokesman told Leonard that he couldn't comment on many specifics of the agreements because they are confidential and the subject of litigation, but "We do not believe there is any merit to allegations about our licensing agreement. Our approach to licensing many companies is pro-competitive and has enabled literally hundreds of seed companies, including all of our major direct competitors, to offer thousands of new seed products to farmers." (Read more)

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